For the Appellant (s)      :    Mr. Supriyo Chattopadhyay, Advocate

ORDER

1.      This First Appeal filed under Section 19 of the Consumer Protection Act, 1986 (in short the “Act”) challenges the order dated 07.11.2023 of the West Bengal State Consumer Disputes Redressal Commission (in short “the State Commission”) in Consumer Complaint No.116 of 2013 dismissing the Complaint filed by the Appellant herein.

2.      The delay of 157 days in filing of this Appeal has been considered in the light of the application for condonation of delay filed vide IA No.10369 of 2024.  For the reasons stated therein, the delay was condoned in the interest of justice.

3.      We have heard the learned Counsel for both the parties and given careful consideration to the material on record.

4.      The relevant facts of the case, in brief, are that the Appellant is a Society registered under the West Bengal Society’s Registration Act, 1961 and that the Appellant is a Hospital which provides health services to patients under an arrangement which subsidizes their treatment.  The Appellant had placed an order for the purchase of a pre-owned CT scanner (model Pronto) on 02.07.2012 on the Respondent and made an initial payment of ₹7 Lakhs.  Although promised by the Respondent on 08.11.2012 that the delivery of the said CT Scanner would be made on 08.11.2012, the same was not delivered as promised.  According to the Appellant, the Respondent had assured vide its letter dated 08.11.2012 that the necessary approval of the system would be made available from the Atomic Energy Regulatory Board (AERB) in due course of time.  The approval of the Atomic Energy Regulatory Board (AERB) was an essential requirement for such equipment in view of radiological emissions in the CT Scanner Machine and was as per the regulations of the Government of India.  However, despite regular follow up and assurances by the Respondent, the equipment was not supplied and, therefore, on 01.03.2013, the Appellant served a Legal Notice on the Respondent.  According to the Appellant, the CT Scanner Machine, although subsequently delivered, did not have the requisite clearance from the AERB and as a result, it suffered loss and injury to its reputation as a Hospital and therefore, it sought a compensation for ₹70 Lakhs on account of deficiency in service on the part of the Respondent.  Appellant also sought refund of ₹90 Lakhs with interest @ 18% P.a. till the recovery of such amount which had been paid as advance and Rs.5 Lakhs as legal charges.   Thereafter, a Complaint was filed before the State Commission praying for the relief, as stated above, which came to be disposed by way of contest by the State Commission on 07.11.2023.  The State Commission held that the Appellant was not a ‘consumer’ under Section 2 (d)(1) of the Act since the machine in question had been purchased for a commercial purpose and not exclusively for the purpose of earning of ‘livelihood’ by ‘self-employment’.  It was also held that being a used machine bought on second sale, it was not covered under any guarantee or warranty and therefore, the machine did not fall within the purview of the Act.  It was also held, on the basis of the judgment of the Hon’ble Supreme Court in Kalpavruksha Charitable Trust vs. Toshniwal Brothers (Bombay) Pvt. Ltd. 2000 (1) SCC 512, wherein it was held that in the case of diagnostic centres which utilize CT Scanner, the service is rendered against payment and even if a small percentage of patients are provided free service, the goods that were used for the same would fall under the meaning of “commercial purpose”.  It was, therefore, held that the Appellant was not a “consumer” under the Act and the Complaint was dismissed.  This order is impugned before this Commission.

5.      It is the case of the Appellant that the purpose for which this machine in question had been purchased was not a ‘commercial purpose’ as the Institution was registered under the West Bengal Cooperative Societies Act and was engaged in charitable purposes of providing health related services.  It was argued that the Samity was a ‘consumer’ under the ambit of the Act since it provided services in a charitable manner and charged only nominal fees from patients who wished to undergo diagnostic examination for health reasons.  It was further contended that the equipment had been bought on resale but was intended for a charitable purpose and, therefore, even though it was not covered under any warranty, it did not amount to the Appellant being ousted on the grounds of not being a ‘consumer’ under the Act.  On merits, it was contended that the Respondent had failed to supply the CT scanner with the requisite certification from the AERB as mandated by the Regulations of the Government of India and, therefore, the machine could not be put to use.  Even though an advance had been paid to the Respondent, the supply of the machine remained infructuous as it could not be put to use in the absence of the mandatory certification and, therefore, the Appellant had been put to loss for which it had prayed for compensation before the State Commission.  It was contended that the order of the State Commission was erroneous in that it failed to appreciate that being a consumer, the Appellant was entitled to relief for deficiency in service on part of the Respondent in not supplying the machine with the requisite mandatory certificate from the Government of India without which the machine could not be put to use.  Therefore, it had suffered injury and was entitled to be compensated for the same.  Reliance was placed on various case laws in this regard as under:

(i)     Gulf Tribandrum Air-Fare Forum vs. The Chairman And M. D. AIR India, (1992) 2 CPJ (NC)

(ii)    H. R. Gill Vs. Suryavanshi Kshatriya Dryadi Shamj & Others, (1991) 2 CPJ 705

(iii)  Capital Charitable Education Society vs. Axis Bank Ltd., CC No.269/17

(iv)   Sangeeta Agarwal vs. M/s Chirtels India Ltd., CC 2562/18

(v)    Lilivati Kiritital Mehta Medical Trust vs. Unique Shanti Developers, (2020) 2 SCC 265

(vi)   Sunil Kohli & Anr. Vs. Purearth Infrustrues Ltd., (2020) 12 SCC 235

(vii)  Lourdes Society Snehenjali Girls Hostel & Co. & Ors., (2016) 8 SCC 286

(viii) Madan Kumar Singh (Dead) through LR vs. District Magistrate Sultanpur & Anr., (2009) 9 SCC 79

(ix)   Kunja Bihari Lal (Dead) thorugh LR vs. Urban Improvement Co. Pvt. Ltd., (2014) 2 CPJ (NC) 37

(x)    Shiv Kumar Singh vs. L&T Finance Limited & Anr., CC No.13/08 dated 08.05.2014

6.      Per contra, it was contended by the Respondent that the order of the State Commission did not deserve to be interfered with since it was the case of the Appellant was misconceived and that, the State Commission had rightly held that it had no jurisdiction since the Appellant was not a consumer under the ambit of Section 2(1)(d)(i) of the Act as the Act excluded a person to be a “consumer” who obtains goods for resale or for any commercial purpose.  It was argued that in the instant case, the Scanner machine had been purchased by the Complainant/Appellant for use in a commercially run Hospital and, therefore, any attempt to take shelter under the Consumer Protection Act was unacceptable.  It was admitted that the Appellant had placed a purchase order on 25.06.2012 on it for the supply of a preowned Hitachi Spiral CT Scanner System (model Proton) for a consideration of ₹24,50,000/- on ‘as is where is’ basis upon mutually agreed terms and conditions.  According to the purchase order, a sum of ₹7 Lakhs was paid as advance on 25.06.2012 by way of cheque and that the balance amount of ₹17,50,000/- was to be paid against delivery of the CT Scanner system subsequently.  An Acceptance Letter was issued by it to the Appellant on 10.08.2012.  However, the balance amount of ₹17,50,000/- was not paid by the Appellant who breached the contract by delaying the payment to the Respondent.  It was submitted that even the cheque dated 29.08.2012 for ₹7 Lakhs was dishonored which was informed to the Appellant whereupon it undertook to issue another cheque.  Thereafter, a sum of ₹10,50,000/- was paid after much follow up when the same was not honored and subsequently, payment of ₹5 Lakhs on 03.10.2012 was paid.  Despite delays in payments, the Respondent submitted that the CT Scanner was installed at the site on 06.10.2012 in a satisfactory condition and any installation report was duly signed by the Appellant.  A subsequent cheque of ₹10,50,000/- again stood dishonored and despite delivery of the CT Scanner on 10.08.2012 the payment was delayed for over a year.  The Respondent had confirmed to the Appellant vide letter dated 08.11.2012 that the CT Scanner machine was approved by the Atomic Energy Regulatory Board (AERB) and had raised No Objection Certificate in the year 2006 when this particular model had been imported and sold as a new machine.  It was contended that the Appellant had not paid ₹5,50,000/- even after the installation of the CT Scanner and had, therefore, approached the State Commission with unclean hands.  According to the Respondent, as per the Atomic Energy (Radiation) Protection Rules 2004, a CT Scanner required clearance of the Radiological Safety Division of the Regulatory Board under the Government of India for the supply, service and quality assurance or diagnostic x-ray equipment.  It was stated that the Respondent was not required to provide any approval once a licence had been obtained.  On the contrary, the Appellant as the end customer was required to satisfy  the AERB regarding the requirements under the Rules of 2004.  It was the contention of the Respondent that the Consumer Complaint was manifestly beyond the purview of the Consumer Protection Act and that by not making the requisite payment to the Respondent, it was the Appellant who was in default in the present case.

7.     From the material on record and the submissions of the parties, it is apparent that under the Rules of 2004, it is necessary for a licence to be obtained by way of an NOC at the time of import of a CT Scanner machine of the type that is the subject matter of this Appeal.  The contention of the Respondent is that the same had been obtained at the time of import in 2006 and that it was not required thereafter when the machine was resold to the Appellant.  There also appears to be some dispute between the parties with regard to the payments for the said machine with the Respondent contending that a sum of ₹5,50,000/- was still outstanding with regard to the payment for the CT Scanner purchased by the Appellant.  On the other hand, the Appellant would have us believe that the Respondent supplied the machine without the requisite clearance under the Rules of 2004 and, therefore, it was unable to put the machine to use. 

8.      Be that as it may be, the issue of maintainability raised by the Respondent needs to be addressed at the outset.  It is the contention of the Respondent that the Appellant was not a ‘consumer’ under the Act since the CT Scanner had been purchased by it for ‘commercial purpose’ and that it was required to provide diagnostic services for a cost.  It was also contended that it was not required for the purpose of earning ‘livelihood’.  The State Commission has held on the basis of the judgment of the Hon’ble Supreme Court in Kalpavriksha (supra) that as laid down in Laxmi Engineering Works Vs P.S.G. Industrial Institute, (1995) 3 SCC 583 by the Apex Court, such purpose needs to be decided on a case to case basis on the basis of the facts of each case.  It was held by the State Commission that in the present case, the Appellant was a hospital in Indore which was run as an entity registered under the Societies Act for ‘commercial purposes’ and, therefore, it did not fall under the purview of a ‘consumer’ under the Act.  It is evident that the Appellant is a society which runs a Charitable Hospital as admitted.  By its own admission, the Appellant also states that it charges nominal fees for various treatments and that it had intended to establish a path lab through the purchase of this equipment.  It has not been denied that the CT Scanner would not have been used for a ‘commercial purpose’ through the charging of requisite charges.  It is admitted and contended that the failure on part of the Respondent in supplying the requisite clearances of the AERB prevented the Appellant from using the equipment thereby putting it at loss for which purpose, a claim of ₹94 Lakhs was preferred before the State Commission in Consumer Complaint No.116 of 2013. 

9.     It is apparent from the records, therefore, that the Appellant had obtained the CT Scanner for the purpose of ‘commercial purpose’ which was not intended for its ‘livelihood’.  The finding of the State Commission, therefore, that the Appellant was not a consumer under the ambit of Section 2 (1) (d) of the Act cannot, therefore, be faulted or held to be perverse.  We find no reason to interfere with the order of the State Commission which is reasoned and is accordingly upheld.    There shall be no order as to costs. 

10.    All pending IAs, if any, stand disposed of with this order.